Sustainablog

This blog will cover some news items related to Sustainability: Corporate Social Responsibility, Stewardship, Environmental management, etc.

8.1.05

21 EU nations ready to make Kyoto emissions cuts

21 EU nations ready to make Kyoto emissions cuts
Associated Press, 6 January 2005 - The European Union head office said it
approved a further five national emissions trading plans Thursday, as the
EU began participating in the Kyoto climate change pact this month.
However, a further four - from Greece, Italy, Poland and the Czech
Republic - still needed to be approved, it said.
The European Commission said it accepted five further plans Thursday, from
Cyprus, Hungary, Lithuania, Malta and Spain.
EU Environment Commissioner Stravros Dimas said his office expected to
approve the outstanding plans "as soon as possible," likely within the
next few weeks, he said in a statement.
Dimas said the EU head office had to ensure that "these member states can
take part fully in the European emission trading scheme, which has now
formally started."
The emissions trading plans are at the heart of the EU's policy to cut
greenhouse carbon dioxide emissions in a cost-effective way.
The plans are a key part in the EU's implementation of the 1997 Kyoto
global climate change pact, which commits the 25-nation EU to cut its
emissions of carbon dioxide by 8 percent from 1990 levels by 2012. So far,
emissions are down only 2.9 percent.
The latest approvals covers pollution quotas for some 1,300 industrial
sites, most of which are power plants and factories, the EU said.
The EU aims to involve some 12,000 such sites under its scheme.
Under the trading system, European companies that emit less carbon dioxide
than allowed under set quotas can sell unused allotments to those who
overshoot the target. The profit motive is expected to drive efforts and
technology and bring "substantial cuts" in emissions of carbon dioxide,
which makes up 80 percent of the EU's greenhouse gases, EU officials have
said.
EU governments have to have their emissions plans up and running by March
1 at the latest. If they do not they could face hefty fines from the
European Commission, which is overseeing its implementation.


Emissions position may cost U.S. jobs, conservationists say / A Role For US Firms In Energy Cleanup

Emissions position may cost U.S. jobs, conservationists say
Duluth News-Tribune, 2 January 2005 - When some U.S. political leaders
fight against laws that would cut greenhouse gases, they say new
regulations would cost jobs and hurt the economy.
The added costs forpollution-control equipment and moving to new energy
sources, they contend, would zap the economy of needed capital and cost
thousands of jobs in industries such as taconite and steel production.
In fact, a 1997 study by the Competitive Enterprise Institute, still often
sited, predicted 260,000 U.S. workers would lose their jobs soon after the
U.S. signs the Kyoto emissions treaty, with another 5 million jobs
threatened. By comparison, about 7 million people are unemployed
nationally.
But Northland conservation groups and renewable energy businesses say it's
actually U.S. business that's losing out as the rest of the world moves to
new energy sources.
"As we watch the rest of the world move on without us" in renewable
energy, "I can't help but think of Detroit in the 1970s, when the U.S.
auto industry stood still and was nearly wiped out by foreign
competition," said Christopher Reed, a renewable energy expert who founded
Nemadji Energy Co. at his home in Nickerson, south of Duluth. "I don't
want to see that happen with energy. But it already seems to be
happening."
Other nations are taking the lead in developing industries that produce
windmill parts, assemble photovoltaic panels and create the gadgetry that
make renewable energy systems work. Solar energy is a $7 billion industry
globally. Japan produces more than half of all photovoltaic panels.
In the United States, proposed legislation designed to help reduce
greenhouses gases, such as the bill written by U.S. Sens. John McCain,
R-Ariz., and Joseph Lieberman, D-Conn., would require U.S. industry to
reduce air pollution such as carbon dioxide.
The McCain-Lieberman legislation -- opposed by President Bush and
languishing in Congress -- would favor clean-burning power plants, push
dirty plants out of business, and spur rapid growth in the renewable
energy market as utilities and others scramble to find low-cost
alternatives to coal, said Carin Skoog, Minnesota representative for the
National Environmental Trust.
She said the United States should sign on to the Kyoto Protocol not just
to reduce greenhouse gases, which many scientists say are spurring a
warmer climate, but also to boost the economy and high-tech jobs.
A National Environmental Trust report on the U.S. renewable energy
industry, released in mid-December, said U.S. business is about to lose
out on more than $10 trillion in renewable energy spending globally during
the next 20 years if the U.S. government doesn't act.
Many U.S. business leaders want to participate in emissions trading and
the renewables industry, but they'll be ineligible if the United States
doesn't sign the Kyoto treaty, the report notes.
The National Environmental Trust also wants the U.S. government to commit
to stable subsidies for renewable energy production to jump-start the U.S.
industry. Eventually, when the industry matures, renewable energy such as
solar and wind won't need the government's help, the group says, and when
the real costs of coal-fired electricity are figured in -- including
cleaning up greenhouse gases -- the cost of renewable energy will be
competitive on its own.
Multinational companies have been reluctant to invest in the U.S.
renewable energy industry because government support has been sporadic,
creating a boom and bust cycle with no clear direction.
But in Germany, for example, legislation approved in 2000 guarantees that
utilities buy back solar energy at a premium price. German law also
requires that 12 percent of the nation's energy be created by renewables
by 2010. The law will demand 50 percent renewable electricity by 2050, and
it has created a rush to install solar and wind systems to generate
electricity. In four years, German production of electricity from
renewable sources jumped from 4.7 percent to 10 percent.
Germany also is promoting subsides for companies that produce renewable
energy technologies for exportation, creating markets for German goods and
German jobs.
"It's created a huge economic boon there, a whole new industry. It's
almost impossible to get ahold of large solar panels now because they are
all going to Germany," Reed said. "Sometimes, you need the government to
take the lead."
Mike LeBeau, president of Conservation Technologies, a Duluth company that
installs renewable energy systems and conducts energy conservation audits,
agreed that the United States needs to act now to take advantage of the
coming global boom in renewable energy.
Germany "is a great example of how a new economy can take off with a
little help," he said. "There's going to be a transition... But the
earlier we act, the smoother that transition will go. There are going to
be so many new opportunities we shouldn't miss out on."




A Role For US Firms In Energy Cleanup
The Boston Globe, 30 December 2004 - While the Bush administration was
working to stall the global warming talks in Buenos Aires this month,
US-based companies have been taking the lead in developing and utilizing
technologies to reduce greenhouse gases.
American Electric Power and Cinergy, two of the nation's biggest carbon
emitters, are making investments in clean-coal technologies and have
acknowledged the need for congressional action on national carbon
controls. Meanwhile, other companies such as Cummins Engine and General
Electric are already seeing a windfall from clean energy technologies.
These companies form the vanguard of a new economic world order.
By reducing greenhouse emissions and ratcheting up new climate-friendly
technologies, US companies can create jobs and launch an era of economic
growth akin to the start-up phase of the Internet. If CEOs fail to realize
these opportunities, their companies will soon fall far behind overseas
competitors already honing their strategies to compete in a
carbon-constrained world.
On New Year's Day, thousands of power plants, factories, and other
facilities throughout Europe will begin operating under new greenhouse gas
quotas. Other non-European countries are also developing carbon reduction
plans as they move to comply with the Kyoto Protocol, which begins Feb.
16. The protocol, which the United States refused to ratify, requires most
of the world's developed countries - including Canada, Japan, Russia, and
all of the European Union - to reduce their greenhouse gas emissions by 5
percent from 1990 levels by 2012.
Global companies in the United States have no choice but to join the
carbon-reducing movement. Whether it's GM cars in China or Alcoa aluminum
in Europe, the carbon footprint from making and using their products is an
increasingly important factor for US businesses competing overseas. Alcoa
has already announced plans to upgrade three of its smelters in Spain to
comply with the new rules.
The carbon-constrained global economy is also opening new opportunities -
markets that some US companies are already seizing on for new revenues.
Cummins Engine is selling thousands of compressed natural gas bus engines
to Beijing, which is pushing to have its entire 118,000 bus fleet
operating on clean energy by the 2008 Summer Olympics. General Electric
has locked its sights on the burgeoning wind power market, which it
predicts will grow from 31,000 megawatts of installed capacity today to
more than 83,000 megawatts worldwide by 2007.
But most US companies still lag far behind their worldwide competitors in
facing the challenges posed by global warming. Too many - including
leading electricity providers, oil and gas producers, and automakers - are
acting as if global warming and carbon controls are fiction.
Meanwhile, the financial risks from global warming are growing each day.
So serious is the issue that the world's second largest re insurer, Swiss
Re, is telling its corporate clients to come up with strategies for
handling global warming or risk losing their liability coverage.
Tackling this challenge falls not just on companies, but on investors too.
Here are three strategies they should be pursuing: First, investors must
understand the financial risks for companies in which they own shares and
companies must do a better job of analyzing and describing those risks in
the public reports they file with the Securities and Exchange Commission.
If companies don't do this, investors should demand it. A growing number
of the nation's largest pension funds are filing shareholder resolutions
requesting that companies disclose their risks from climate change and how
they plan to avert them. Several of these resolutions received record-high
voting support this year -in the case of oil and gas companies, as high as
37 percent.
Second, investment managers need to more accurately assess climate risk
exposure in evaluating companies and industry sectors. More robust
research practices are also needed to better analyze and model how
businesses and sectors are threatened by various global warming scenarios,
whether from weather impacts or regulatory changes.
Third, investors must channel their investment capital to take advantage
of new clean technology opportunities. As more states and countries move
to adopt carbon controls - whether on vehicles in California or China, or
on power plants in the Northeast - markets for hybrid vehicles, clean-coal
processes, and other clean technologies will only magnify. Investors
should take advantage by investing in companies and portfolios that are
well positioned.
Investors have a fiduciary duty to make sure companies are paying
attention to global warming. Until a larger number of investment managers
weigh in by demanding more accountability and disclosure from companies,
climate risk will continue to fester as a giant hidden liability with
potentially dire consequences for American companies, their shareholders,
and the US economy.
Is the United States going to lead the technological innovation and
resulting job growth as it did with the Internet? Or is it going to lag
behind as Toyota and other foreign competitors develop and dominate clean
technology markets? The efforts of a small number of companies suggest the
enormous potential available. The challenge is now before CEOs to lead
their companies in realizing the opportunities posed by a
carbon-constrained global economy.
Timothy E. Wirth is president of the UN Foundation and a former US senator
from Colorado. Mindy S. Lubber is executive director of Ceres, a
Boston-based national coalition that runs the Investor Network on Climate
Risk.


7.1.05

A fortune at the bottom of the pyramid

A fortune at the bottom of the pyramid
Financial Times, 3 January 2005 - Across India, educationalists with an
eye for business are offering English teaching to the poor - and making
money in the process.
Barely an economic conference goes by in India that does not devote
atleast one session to the importance of creating more small businesses.
Yet, untouched by these power point presentations, small businesses are
already flourishing in India at the poorest levels of society - often
unregistered and without licence.
In the slums of Hyderabad, a city in India's south, the number of private
schools now exceeds that of government schools by two to one. Often housed
in small tenements and cramped buildings, the schools are as far removed
as possible from the rarefied corridors of India's elite private
establishments, such as Doon School in the Himalayan foothills.
But in their rapidly proliferating numbers, India's slum private schools
are ushering in a social revolution that is largely beneath the radar of
the country's policymaking elites. It is a silent revolution that conveys
two important messages. First, India's poorest classes want their children
to be educated - and they are setting aside money to pay for it; and
second, they want their children to be educated in English.
Mohammed Anwar, the principal of the M.A. Ideal High School - a private
school lodged inconspicuously in Hyderabad's old city - was one of the
first local "slum-education entrepreneurs" when he established the school
in the late 1980s. At the time, there was only a handful of private
schools in the Muslim-dominated old city. Now there are more than 1,000.
"None of the government schools use English as a medium," says Mr Anwar.
"These parents are often illiterate. In the past, if they paid for private
education, it would be in Arabic classes so their children could learn the
Koran. Now all they want is English-medium classes, so their children can
get better jobs."
In Hyderabad's labyrinthine backstreets, among the traditional vegetable
stalls, small mechanic shops and mosques, almost every other signboard
proclaims a private school - often with misleading descriptions.
Quite without sanction, these small businesses call themselves Grammar,
Convent or Public Schools - in imitation of their anglophone counterparts
at the apex of India's social pyramid. A large proportion of these schools
are "unrecognised", which means they operate without the permission of
India's notorious education inspectorate. But Hyderabad's poorly paid
inspectors are happy to permit them to continue in exchange for a
well-established system of bribery.
S.V. Gomathi, director of the Educare Trust, a Hyderabad-based
non-government organisation that supports private schools, says schools
pay as much as 10 per cent of their profits in bribes to inspectors. The
average annual bribes amount to two per cent of school revenues, says Ms
Gomathi.
"Even the registered (licensed) private schools have to pay frequent
bribes because it is impossible for the schools to comply with all the
regulations that govern private schools," she says. "Nowadays, bribes are
also paid in kind, such as with SIM cards or liquor."
Mr Anwar, also president of the Dynamic Federation of Private Schools of
Andhra Pradesh (the state of which Hyderabad is capital), says there is no
way any school could fully comply with the education department's detailed
regulations.
For example, the rule book specifies the exact size of classrooms, the
average distance between children's study desks, the size of playground
areas and so on. "The rule book gives the inspectors almost limitless
scope to threaten us with closure or harassment," he says. "None of the
government schools comply with the rulebook either. But they don't have to
pay bribes."
Yet, in spite of high "regulatory" costs, parents continue to choose these
makeshift private schools over their better furnished government
counterparts. Why? One critical reason - in addition to the fact the
medium of instruction is English - is that teachers almost always turn up
for duty in the private schools.
Government schools across India suffer from chronic teacher absenteeism,
with recent studies suggesting that between one third and one half of all
public sector teachers are absent at any one time. Partly this is because
there is little sanction a school principal can use against a wayward
teacher. As civil servants backed by strong trade unions, government
teachers are virtually unsackable.
Another cause of widespread absenteeism is the fact that many teachers are
posted to remote rural districts to which they have no previous ties or
inclination to live.
"It is not often you will get government teachers who are from the local
community," says Ms Gomathi.
In contrast, private schools usually recruit from the surrounding
environs. Often the private school teachers have few qualifications and
are paid at between one quarter and one third of the salaries of their
government counterparts. Yet they are rarely absent - perhaps in part
because they can be sacked.
"Our teachers do have fewer qualifications than government teachers,"
admits Ghouse Mohammed Khan, principal of Indian Stars Grammar School in
another Hyderabadi backstreet. "But they are from this area and the most
important factor in a child's learning is his or her enthusiasm to learn."
The classes in Mr Khan's school are well attended - not only by the
children but also by the staff. The children, learning English using an
entertaining new method called Jollyphonics, sing English nursery rhymes
as if it were second nature. It is hard to believe that these are the sons
and daughters of rickshaw drivers and grocery sellers.
"We wanted our daughters to have the benefit of English education," says
Rizvana Begum, a fully veiled Muslim woman, whose husband is a part-time
chauffeur. Mrs Begum's husband spends one-tenth of his Rs5,000 (Pounds 59)
monthly income on fees. "The world has changed since we were young. Now
you need to have new skills."
According to Educare, which will this month publish detailed findings of
aptitude surveys in Hyderabad, these skills are being welltransmitted.
Children in the private schools score higher on almost every subject
except Urdu and Telugu, the media of instruction in the government
schools.
One reason that private school teachers have fewer qualifications is that
there is no such thing as an English-medium teacher training college in
India. But the poor are ahead of government policy on this matter.
"English is no longer seen as a colonial language by ordinary Indian
people," says Gurcharan Das, a commentator in Delhi. "It is seen as a tool
of commerce and upward mobility."
Few studies exist on the growth of private slum or village schools
elsewhere in India. But anecdotal evidence suggests that Hyderabad is not
untypical. Which means that - not for the first time - India's political
and bureaucratic elite has played no part in a very positive grassroots
trend.
In fact, India's administrative system remains a hindrance rather than a
help. "The only interaction we have with government is when they want
bribes," says Mr Anwar. "What has changed are the aspirations of the poor,
not the attitudes of the bureaucrats."
WHY THERE IS MONEY IN 'SLUM' EDUCATION
* High teacher absenteeism in government schools. Studies show that in
some parts of India up to half of teachers are absent from school at any
one time. Since government teachers are virtually unsackable, this looks
unlikely to improve.
* Growing demand for English-language education among the poor. Indians no
longer see English as a colonial language but as a passport to economic
opportunity in the jobs market. Government schools do not use the English
medium.
* Greater economic aspiration among the poor. Since 1991, when India began
to open up its economy, annual growth has risen to almost 6 per cent. The
rapid economic transformation of India has kindled greater aspirations
among its poor, who no longer see poverty as a fate that must necessarily
be endured.
* Affordable schooling. Slum schools can charge as little as Rs1,200 a
year in fees per pupil and as much as Rs10,000. Entrepreneurs still make
money, even though they charge less than schools such as Doon School,
which charges Rs127,000 a year.
Copyright 2005 The Financial Times Limited
Financial Times (London, England)


A marriage of convenience: Businesses will be socially responsible if it pays, prizewinner says

A marriage of convenience: Businesses will be socially responsible if it
pays, prizewinner says
The Guardian, 5 January 2005 - Like the makers of The Corporation, the
phenomenally successful documentary about the evolution of big business,
the winner of this year's Guardian/Ashridge Business School MBA essay
competition rejects any suggestion that companies are increasingly
socially responsible.
Corporate social responsibility (CSR) may be a company PR manager's cause
du jour; it may even win a few brownie points within the community. But,
according to MBA student Nick Tilston, it is simply not taken seriously by
most businesses.
His award-winning essay is entitled Corporate Social Responsibility
Doesn't Matter - Business Profits Do. "The problem," he says, "is that
much of what is passed off as stakeholder responsibility and CSR is merely
an exercise in PR in order to keep fractious pressure groups at bay."
Profits will always be important, he contends, but the trick will be to
convince companies that the bottom line can be aided by an ethical
approach. The key is to ask "not how we make businesses more ethical but
how we can encourage businesses to pursue socially progressive activities
in their own interests".
Tilston believes companies need to wake up to the fact that consumers are
increasingly morally motivated and will buy products from companies they
are convinced are "doing the right thing". Whether by offering healthy
options at McDonald's, or Free Trade coffee at Starbucks, profits can be
boosted if businesses acknowledge that sales are "increasingly tied to
their performance as corporate citizens".
Tilston, a management consultant for the past eight years at Plato
consulting in Glasgow, and now doing an MBA at Strathclyde Business School
part time, concludes that there is "no point" appealing to a corporate
conscience because it isn't there. "They have got to be shown that there
is a link between profit and CSR. It's about being practical and realistic
about what is possible."
Copyright 2005 Guardian Newspapers Limited
The Guardian (London)


5.1.05

Sustainability pays off ? WBCSD members outperform global benchmarks

Sustainability pays off ? WBCSD members outperform global benchmarks
Geneva, 4 January 2005 - In an update of the 2003 study "Sustainable
Development Pays Off" , Kommunalkredit Dexia, an Austrian Asset Management
company, confirms that WBCSD members enjoy high investor confidence.
The study ( 368 kb) analyzed the performance of the 141 WBCSD members
listed on stock exchanges around the world. The result was a clear
outperformance of an equal-weight WBCSD member portfolio over the
corresponding market indices, particularly on a long-term basis.
That firms engaging in sustainable development show a better performance
in all market segments than the respective benchmark indices with a few
exceptions has already been established. Interestingly, however, the study
reveals that the lead role observed in companies with sustainable
orientation seems to become more pronounced over time.
In order to succeed consistently in the future, managing ecological and
social issues will become a prerequisite for companies to be able to deal
with new market conditions. The study shows that this picture holds true
regardless of the location of production and distribution of individual
enterprises.
The active effort around lasting development lets enterprises become more
competitive, shock resistant and flexible in a rapidly changing
environment. It also increases their popularity among customers and highly
qualified employees, states the study when describing the philosophy
behind sustainable development.
Since the results of the latest study continues to support the findings of
the 2003 report - that sustainable enterprises are generating a superior
performance compared to the total stock market - Kommunalkredit Dexia
clearly recommends investors to overweight such firms in their security
portfolios.
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